2 - Hong Kong’s economic structure

Summary

The dominance of substantial shareholders

The history of Hong Kong discussed in Chapter 1 has cut a path of development in which private ordering by both British and Chinese merchants greatly controlled the shape of the Hong Kong economy, society and government, which left the regulatory actions and interventions of government minimal. It has also been a history of providing services outward towards foreign partners, both in trade and in finance, first in the context of the British Empire and later within the Chinese economy. Britain and the Commonwealth were the sources for the development of much of Hong Kong’s common law, meaning that the doctrines and principles found in this body of law are not always well adapted to the local circumstances of Hong Kong. While this relationship is no longer binding post-1997, the path dependence of Hong Kong’s history is very strong in this regard. On the other hand, the relationship with China has been a constant in Hong Kong’s history that varied in shape and intensity as a factor of the state of political affairs in China. At times Hong Kong has thrived from its relationship with China and at other times it has thrived because China chose to implement policies that crippled its productive capacity and engagement in international trade, such as during the third quarter of the twentieth century when Hong Kong (together with Taiwan) briefly became China’s ersatz manufacturing hub.We thus understand that the Region called Hong Kong presents a very complex phenomenon – absorbing and adapting British institutions while reacting and adjusting itself in relation to China’s, Asia’s and indeed global developments.